The R&D Index: Market Watch for the week ending March 31, 2017 closed at 1,639.29 for the 25 companies in the R&D Index. The Index was up 0.31% (or 4.99 basis points) over the week ending March 24, 2017. Fourteen R&D Index companies gained value last week from 0.17% (Ford Motor) to 3.26% (Siemens). Eleven R&D Index companies lost value last week from -0.08% (Eli Lilly & Co.) to -2.70% (Bristol-Myers Squibb).
Despite Trump campaign promises to change the H-1B immigration process for highly skilled workers, the 2017 process will remain mostly the same lottery-based system used in previous years for the 85,000 positions available which become available in early-April. An executive order making changes circulated earlier this year was not signed by President Trump. In 2016, the government received 236,000 applications for the 85,000 available slots, of which 20,000 are reserved for individuals with advanced degrees.
The Trump administration’s nominee to head the FDA, Dr. Scott Gottlieb, has promised to recuse himself from any decisions for one year regarding about 20 companies, including R&D Index members GlaxoSmithKline and Bristol-Myers Squibb, with whom he consulted for decisions on drugs in their research pipelines. GSK and BMS were both down for the week.
Federal Reserve Bank of Chicago President Charles Evans commented last week that the Fed could raise short-term interest up to four times in 2017, if inflation picks up. Current data does not now indicate that trend, but consumer inflation is nearing the Fed’s target of 2.0%.
President Trump is scheduled to meet with China’s President Xi Jinping this coming Thursday and Friday at Trump’s Mar-a-Lago resort in Palm Beach, Florida for their first-ever face-to-face meeting. Trump tweeted last week that the meeting will be “very difficult” citing outsourced jobs and trade deficits. A Forbes editorial noted that the meeting will only be difficult because Trump misunderstands the relationships between trade deficits and the U.S. economy. Ahead of their meeting and in response to the calls to reduce trade imbalances, China’s Vice Foreign Minister Zheng Zeguang called on the U.S. to ease restrictions on technology exports and improve the investment climate for Chinese businesses in the U.S.
R&D Index member Roche last week received FDA approval for its multiple sclerosis drug, Ocrevus. Analysts expect this drug could top $4 billion in annual revenues by 2022. The drug lists for $65,000 annually for patients and despite some backlash on high drug pricing, analysts still expect little scrutiny in this area from regulators.
| R&D Index Week Ending March 31, 2017 |
| Ticker | Exchange | 2015 R&D billions$ | 03/24/17 | 03/31/17 | 3/31/17 to 3/24/17 | 3/31/17 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 64.98 | 65.86 | 1.35% | 18.71% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 35.16 | 36.07 | 2.59% | 4.70% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 31.91 | 32.03 | 0.38% | -7.08% |
| 4 | Toyota | TM | NYSE | 9,112 | 111.36 | 108.62 | -2.46% | -11.72% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 125.48 | 124.55 | -0.74% | 21.25% |
| 6 | Novartis | NVS | NYSE | 8,935 | 74.37 | 74.27 | -0.13% | -13.72% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 140.64 | 143.66 | 2.15% | 36.48% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 34.00 | 34.21 | 0.62% | 5.62% |
| 9 | General Motors | GM | NYSE | 7,500 | 34.56 | 35.36 | 2.31% | 3.68% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 63.18 | 63.54 | 0.57% | 20.30% |
| 11 | Ford Motor | F | NYSE | 6,700 | 11.62 | 11.64 | 0.17% | -17.39% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 34.08 | 33.80 | -0.82% | 24.45% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 44.65 | 44.61 | -0.09% | 22.12% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 31.31 | 31.14 | -0.54% | -8.28% |
| 15 | Honda | HMC | NYSE | 5,990 | 30.78 | 30.26 | -1.69% | -5.23% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 55.89 | 54.38 | -2.70% | -20.96% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 56.92 | 57.34 | 0.74% | 14.73% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 44.63 | 45.25 | 1.39% | 6.10% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 84.18 | 84.11 | -0.08% | -0.15% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 42.31 | 42.16 | -0.35% | 4.49% |
| 21 | IBM | IBM | NYSE | 5,247 | 173.83 | 174.14 | 0.18% | 26.57% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 70.56 | 69.20 | -1.93% | -11.17% |
| 23 | Siemens | SIE | XETRA | 4,929 | 124.35 | 128.40 | 3.26% | 42.86% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 107.00 | 108.05 | 0.98% | -6.63% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 6.55 | 6.64 | 1.37% | -30.91% |
| Total | 175,313 | 1634.30 | 1639.29 | 0.31% | 7.74% | |||
| Biopharmaceutical | 694.26 | 693.69 | -0.08% | -0.14% | ||||
| Automotive | 258.88 | 255.08 | -1.47% | -9.21% | ||||
| ICT | 550.26 | 555.48 | 0.95% | 24.42% | ||||
About the R&D Index
R&D Magazine’s R&D Index is a weekly stock market summary of the top international companies involved in research and development. The top 25 industrial spenders of R&D in 2015 were selected based on the latest listings from Schonfeld & Associates’ June 2016 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (7) and conglomerate (2) organizations who invested a cumulative total of more than $175 billion in R&D in 2015, or approximately 11% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2016 Global R&D Funding Forecast. The stock prices used in the R&D Index are tabulated from NASDAQ, NYSE, XETRA and OTC common stock prices (in U.S. dollars) for the companies selected at the close of stock trading business on the Friday preceding the publication of the R&D Index in R&D Magazine’s R&D Daily eNewsletter.
The companies used in the R&D Index include Microsoft, Intel, Roche Holdings, Novartis, Johnson & Johnson, Pfizer, Toyota Motor, General Motors, Merck & Co., Ford Motor, Cisco, Apple Computer, Sanofi SA, Qualcomm, IBM, Astra Zeneca plc, Honda Motor, Daimler, Oracle, GlaxoSmithKline, Siemens, Eli Lilly Co., Ericsson, Bristol-Myers Squibb and Bayer AG. Stock prices are based on those stocks traded on the U.S. exchanges. R&D Index trends (in the stock prices) are just one indicator of the amount of capital available to these high-technology companies to invest in R&D and should not be implied to indicate the absolute value of R&D investments made by these organizations. The companies chosen for the R&D Index have very large sophisticated internal and global R&D organizations with each company investing between $4.1 and $12.4 billion annually on their R&D efforts.
